Crude Oil, Gold and Natural Gas Market Commentary For Saturday Dec. 3rd

Crude oil closed higher on Friday as it extends this week's rally. The mid range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If January renews the rally off this month's low, the 75% retracement level of the May-October decline crossing at 105.42 is the next upside target. Closes below last Friday's low crossing at 94.99 are needed to confirm that a short term top has been posted. First resistance is the 75% retracement level of the May-October decline crossing at 105.42. Second resistance is the 87% retracement level of the May-October decline crossing at 110.46. First support is last Friday's low crossing at 94.99. Second support is the reaction low crossing at 89.05.

Gold closed higher on Friday as it extended this week's rally. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, November's high crossing at 1806.60 is the next upside target. Closes below last week's low crossing at 1670.50 would renew the decline off this month's high. First resistance is today's high crossing at 1767.10. Second resistance is November's high crossing at 1806.60. First support is last week's low crossing at 1670.50. Second support is the reaction low crossing at 1607.30.

Natural gas closed lower on Friday as it extends the trading range of the past two weeks. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above Monday's high crossing at 3.720 are needed to confirm that a short term low has been posted. If January renews this year's decline, monthly support crossing at 3.225 is the next downside target. First resistance is Monday's high crossing at 3.720. Second resistance is the 25% retracement level of the June-November decline crossing at 3.936. First support is last week's low crossing at 3.461. Second support is monthly support crossing at 3.225.

The Currency War Big Picture Analysis for Gold, Silver & Stocks

Spot Natural Gas Prices Dipped to Two Year Low in November

Spot natural gas prices at the Henry Hub in Erath, Louisiana fell to $2.83 per million British thermal units for delivery on November 24, 2011, the lowest price since November 17, 2009. Henry Hub is the benchmark location for key natural gas financial instruments on the New York Mercantile Exchange and the IntercontinentalExchange such as futures contracts, swaps, and options.
Key factors affecting natural gas prices include:

• Growing domestic production. U.S. domestic marketed production averaged 65.4 Bcf/d through September, based on EIA data, an increase of about 7% from the same period in 2010, while demand for the corresponding period was up 2% this year.
• High natural gas storage levels. For the week ending November 25, 2011, natural gas storage inventories were 3,851 billion cubic feet (Bcf), down one Bcf from record inventory levels set the prior week but over 7% above the five-year average.
• Seasonal weather. Warmer-than-average weather across most of the United States has delayed the start of winter weather and the corresponding increased natural gas demand for heating. Through November 28, cumulative U.S. population-weighted heating degree-days in the 2011-2012 winter season are 8% below the 30-year average and are down 16% in the natural gas heating-intensive Northeast region.

Spot prices at Henry Hub rose about $0.70 per million British thermal units after the Thanksgiving Holiday weekend due to cooler temperatures and higher demand.

Source: U.S. Energy Information Administration, based on Bloomberg.
Note: Data included through November 30, 2011.

  

The Currency War Big Picture Analysis for Gold, Silver & Stocks

The Currency War Big Picture Analysis for Gold, Silver & Stocks

I think you will admit that we are in the middle of one major crazy financial mess. The part that makes things really crazy is that it’s not just in the United States anymore but rather serious global problem which if not handled properly could change the way we live our lives going forward or possibly even spark some type of war, hopefully things don’t get that crazy...... But I do know one thing. Fear is the most powerful force on the planet and people do some crazy things when they are backed into a corner.

Anyways, on a more positive tone…... today China decided to help provide more liquidity for the financial system along with the central banks. This news triggered a monster rally in overnight trading making the market gap up sharply at the opening bell. This news did hit the US dollar index hard sending it sharply lower but the question remains “Will today’s news be a one week hiccup in the market?” If Euroland starts printing money it will likely send the dollar higher and stocks lower for 6 -12 months.

Just today I was joking with Kerry Lutz of the Financial Survivor Network about how each country should just give each other country a second chance. Wipe the dept clean and start over knowing this time around exactly how each country truly operates at a financial level allowing everyone to avoid a repeat of this BS. Some countries will get off way better than others because they would get so much dept wiped clean. But isn’t it better than years of problems and possibly wars over food, gold, guns, oil and Canadian water? 

All joking aside, let’s take a look at the weekly long term charts.....…

Dollar Index Showing Possible Massive Rally If Euro Starts Printing Money:

I’m sure my off the cuff options/thoughts will cause a stir but I am fine with that. Everyone I talk to is thinking the dollar is about to fall off a cliff while I think it’s very possible that it does just the opposite. Either way I will be looking to benefit from which ever move unfolds.

Weekly Gold Chart:

Weekly Silver Chart:

Weekly SP500 Chart:

Long Term Thoughts:

I would first like to say that tonight’s report is out of my norm. Generally I do not focus on the big picture negative stuff and I like to avoid it for a few reasons...... One, it’s just downright depressing to talk and think about. And Second I don’t want to be labelled as one of those “The Sky Is Falling” kinds of guys.

So, that being said I think these charts above show a situation what is very possible to happen in the coming 6-12 months. Keep in mind that my focus is on short term time frames as it allows me to avoid and actually profit from major market moves while providing enough information for my followers to learn technical analysis and trade management. And the obvious idea of not looking too far into the future with a negative outlook.......

With headline risk changing the market direction on a weekly basis, this negative outlook could easily change in a couple months. I will recap on the big picture as things unfold in January/February.

Chris Vermeulen
The Gold and Oil Guy.com

Don't miss some of Chris' most recent articles......

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Stocks Soar on Central Bank Action....Crude Oil and Gold Along For The Ride

Crude oil closed higher on Wednesday as it extends the rally off last Friday's low. The mid range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If January renews the rally off this month's low, the 75% retracement level of the May-October decline crossing at 105.42 is the next upside target. Closes below last Friday's low crossing at 94.99 are needed to confirm that a short term top has been posted. First resistance is the 75% retracement level of the May-October decline crossing at 105.42. Second resistance is the 87% retracement level of the May-October decline crossing at 110.46. First support is last Friday's low crossing at 94.99. Second support is the reaction low crossing at 89.05.

Natural gas posted an inside day with a lower close on Wednesday as it consolidated some of Tuesday's rally. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above Monday's high crossing at 3.720 are needed to confirm that a short term low has been posted. If January renews this year's decline, monthly support crossing at 3.225 is the next downside target. First resistance is Monday's high crossing at 3.720. Second resistance is the 25% retracement level of the June-November decline crossing at 3.936. First support is last week's low crossing at 3.461. Second support is monthly support crossing at 3.225.

Gold closed sharply higher on Wednesday and above the 20 day moving average crossing at 1747.60 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, November's high crossing at 1806.60 is the next upside target. Closes below last week's low crossing at 1670.50 would renew the decline off this month's high. First resistance is today's high crossing at 1754.70. Second resistance is November's high crossing at 1806.60. First support is last week's low crossing at 1670.50. Second support is the reaction low crossing at 1607.30.


Is This December Similar to 2007 & 2008 for Gold & Stocks?

Phil Flynn: Taking The Embassy By Storm!

Occupy Tehran? Iranian students, incensed with a new round of sanctions, stormed the British Embassy and added a new dynamic to a market already concerned about the rising tensions in the Middle East. The orchestrated take over from the government was a clear violation of international law and shows Iran's utter lack of respect for anyone else in the world.

The pillaging of the UK Embassy had to have the support of the government because it is unlikely that without the government looking the other way, it would be impossible for a rag tag bunch of students to take over the fortified British compound. Iran, the world's fifth biggest oil exporter, was trying to stir domestic public outrage after a vote by Iran's leaders to end diplomatic relations with the UK and expel the British ambassador and the UK slapped sanctions on Iranian banks and their petrochemical companies.

Obviously these sanctions have some bite as it raised the acrimony of the Iranian regime. The outcome means that more than likely the U.S. will follow suit and put more pressure on the known terror state as it is clear to everyone that Iran is on track to secure a nuclear weapon after a report from the International Atomic Energy Association.

The likely hood of more sanctions against Iran look to tighten supplies of distillate in Europe and will put even more pressure on the world's newest diesel exporter, the US, to keep up with global demand. The United States, Russia, France, Britain and Germany all expressed outrage at the Iran, yet China remained quiet as it desperately needs diesel supply. They are fearful that if Iranian supply is cut it could lead to shortages in China for the coming winter......Read the entire article.


Is This December Similar to 2007 & 2008 for Gold & Stocks?

Proposed KMI and El Paso Merger Would Create Largest U.S. Natural Gas Pipeline Company

The proposed merger of Kinder Morgan Inc. (KMI) and El Paso Corp. (El Paso) announced on October 16, 2011 would create the nation's largest natural gas pipeline company. If approved by state and federal regulatory officials, the combined company would operate about 67,000 miles of natural gas pipelines (see the blue and red lines in the map), or about 22% the U.S. natural gas pipeline network. Upon closing, the proposed $38 billion transaction would be one of the biggest natural gas pipeline mergers in United States history.

El Paso's natural gas pipeline network complements Kinder Morgan's natural gas system. By adding El Paso's network to its own, KMI increases its access to natural gas markets in the Southwest, Southeast, Northwest, and Northeast. El Paso has been extending its reach into these markets. In 2011, El Paso completed three major pipeline projects: Ruby Pipeline, Florida Gas Transmission Phase VIII, and Tennessee Gas Pipeline 300 Line, in total adding around 1,200 miles and 2.6 billion cubic feet per day of capacity to its network.

Source: U.S. Energy Information Administration, based on SNL Financial.

Note: The labeled brown bars represent the four largest deals since 1996. Total transaction value only includes completed and pending deals based on the announcement year.
*Pending transaction

As measured by total dollars, 2011 has been a significant year so far for mergers and acquisitions in the natural gas transmission sector compared with previous years. The proposed merger between Kinder Morgan and El Paso could be the largest U.S. pipeline related merger and acquisition since 1996, representing about 54% of the total transaction value of proposed or concluded mergers so far in 2011, according to SNL Financial.

On June 15, 2011, Energy Transfer Equity agreed to acquire Southern Union for $9.2 billion, making it the second largest pending natural gas pipeline-related deal in 2011. Since 1996, three natural gas transmission mergers and acquisitions deals over $20 billion were concluded according to data from SNL Financial: a $22 billion deal between El Paso and Coastal Corp in 2000; a $21 billion leveraged buyout deal of Kinder Morgan by a group of private investors in 2006; and a $20 billion deal between Enterprise Products Partners and Enterprise GP Holdings in 2010.


Is This December Similar to 2007 & 2008 for Gold & Stocks?

Where is Crude Oil, Natural Gas and Gold Headed on Wednesday Nov. 30th

Crude oil closed higher on Tuesday as it extended the rebound off last Friday's low. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are turning neutral hinting that sideways to higher prices are possible near term. If January renews the rally off this month's low, the 75% retracement level of the May-October decline crossing at 105.42 is the next upside target. Closes below last Friday's low crossing at 94.99 are needed to confirm that a short term top has been posted. First resistance is the 75% retracement level of the May-October decline crossing at 105.42. Second resistance is the 87% retracement level of the May-October decline crossing at 110.46. First support is last Friday's low crossing at 94.99. Second support is the reaction low crossing at 89.05.

Natural gas posted an inside day with a higher close on Tuesday as it consolidated some of Monday's loss. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 3.682 are needed to confirm that a short term low has been posted. If January renews this year's decline, monthly support crossing at 3.225 is the next downside target. First resistance is the 20 day moving average crossing at 3.682. Second resistance is the 25% retracement level of the June-November decline crossing at 3.936. First support is last week's low crossing at 3.461. Second support is monthly support crossing at 3.225.

Gold posted a quiet inside day with a higher close on Tuesday as it consolidated some of this month's decline but remains below the 20 day moving average crossing at 1743.10. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If December extends this month's decline, the reaction low crossing at 1604.70 is the next downside target. Closes above the 20 day moving average crossing at 1743.10 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 1719.30. Second resistance is the 20 day moving average crossing at 1743.10. First support is last week's low crossing at 1667.10. Second support is the reaction low crossing at 1604.70.


Is This December Similar to 2007 & 2008 for Gold & Stocks?

Phil Flynn: Consumer Confidence?

The market awaits the latest reading on consumer confidence but what is the point. The US consumer is showing their confidence with the wild Black Friday and Cyber Monday spending spree. It appears that the US consumers are able to ignore the worries in Europe and the rest of the world, giving incredible upside momentum in the petroleum complex.

It is obvious that the US consumer is feeling better about our economic outlook, or at the very least they just need to get out and spend. So instead of worrying about Europe and looking to the developing world, perhaps the world will once again look to the American consumer to once again bail out the global economy. Ahh just like the old days.

Of course oil is also gaining support from overseas worries. Despite the reports of a natural gas pipeline explosion in Egypt the truth is the election in Egypt seemed to be rather calm.

The Global Warming Conference in URBAN, South Africa is not going all that well. According to the USA Today the conference is warning that global warming already is causing suffering and conflict in Africa, from drought in Sudan and Somalia to flooding in South Africa according to President Jacob Zuma.

He urged delegates at an international climate conference to look beyond national interests for solutions......Read the entire article.


Is This December Similar to 2007 & 2008 for Gold & Stocks?

John Woods: Brace for a Selloff in Crude Oil Prices

John Woods, President of JJ Woods & Associates, says oil will keep rallying in the short term but that traders will dump the black gold before the end of the year.




Is This December Similar to 2007 & 2008 for Gold & Stocks?

India Anticipates $76 Billion Investment in Oil and Gas Sector

India expects INR3.90 trillion ($76 billion) to be invested developing its oil and gas sector from April 2012 to March 2017, the country's junior oil minister said Tuesday.

The development plan includes exploration, production, refining, marketing, storage, petrochemicals and related engineering activities to increase availability of petroleum and petroleum products, RPN Singh said in a written reply to lawmakers in the upper house of Parliament.

India currently meets 80% of its total crude needs through imports. Crude oil imports accounted for 29% of its total import bill of $350 billion in the year ended March 31. Imports are expected to surge over the next few years as an expanding economy drives demand for fuel products, pressuring the country's fiscal position.....Read the entire article.


Is This December Similar to 2007 & 2008 for Gold & Stocks?